Long-awaited Navi Mumbai airport PPP reaches financial close

India’s GVK moves the $2.3bn greenfield development, initially approved in 2007, to the construction phase.

GVK Power and Infrastructure, one of India’s largest conglomerates, has reached financial close on the first phase of the Navi Mumbai International Airport PPP, moving one step closer towards delivering another major aviation hub in the populous country by 2030.

The milestone comes 11 years after the project was initially approved and nearly 18 months after the GVK-led consortium was awarded the rights to develop and operate the airport under a 30-year concession, which could be extended by an additional decade. The consortium’s members are Mumbai International Airport, which holds a 74 percent stake and is a GVK-controlled entity; and the City and Industrial Development Corporation of Maharashtra, the government’s procuring agency, which holds the remaining 26 percent.

At the time of bidding, the entire airport development project, which will be built on 1,160 hectares of land, had an estimated cost of 160 billion rupees ($2.33 billion; €2 billion), according to a GVK spokesman. “Actual costs are [currently] being computed for the first phase,” he said.

The first phase of the Navi Mumbai International Airport is expected to be operational in 2019, with the capacity to serve 10 million passengers per year. That figure is expected to reach 25 million by 2025, and 60 million by 2030, when the aviation hub becomes fully operational as one of the largest in the country.

GVK is also part of a consortium that currently operates Chhatrapati Shivaji International Airport, the existing hub in Mumbai privatised in 2006.

Last year, GVK realised its investment in Bangalore International Airport, an asset it sold to Fairfax India, as the company looked to deleverage through divestments to focus on Mumbai and Navi Mumbai airports.

India’s YES Bank is the lead bank and arranger for the financing package of phase one of Navi Mumbai Airport, and will participate in phase two of the project in the same capacity.